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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 41-2230745 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1300 Post Oak Boulevard, Suite 800 | ||
Houston, TX | 77056 | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share | NASDAQ Global Select Market |
Large accelerated filero | Accelerated filero | Non-accelerated filerþ | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
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Exhibit 4.2 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 31.3 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
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Item 1. | Business |
• | We acquired 100% of the limited partnership interests in the Fund. |
• | We acquired 100% of the equity interests in the General Partner. |
• | We acquired 100% of the equity interests in the Investment Manager. |
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• | Delivering Customized Financing Solutions.We believe our ability to provide a broad range of customized financing solutions to lower middle-market companies sets us apart from other capital providers that focus on providing a limited number of financing solutions. We offer to our portfolio companies customized debt financing solutions with equity components that are tailored to the facts and circumstances of each situation. Our ability to invest across a company’s capital structure, from senior secured loans to subordinated debt to equity securities, allows us to offer our portfolio companies a comprehensive suite of financing solutions, or “one-stop” financing. |
• | Focusing on Established Companies in the Lower Middle-Market.We generally invest in companies with established market positions, experienced management teams and proven revenue streams. Those companies generally possess better risk-adjusted return profiles than newer companies that are building management or are in the early stages of building a revenue base. In addition, established lower middle-market companies generally provide opportunities for capital appreciation. |
• | Leveraging the Skills and Experience of Our Investment Team.Our investment team has over 35 years of combined experience in lending to and investing in lower middle-market companies. The members of our investment team have broad investment backgrounds, with prior experience at private investment funds, investment banks and other financial services companies, and currently include five certified public accountants and one chartered financial analyst. The expertise of our investment team in analyzing, valuing, structuring, negotiating and closing transactions should provide us with competitive advantages by allowing us to consider customized financing solutions and non-traditional and complex structures. |
• | Maintaining Portfolio Diversification.We seek to maintain a portfolio of investments that is appropriately diversified among various companies, industries, geographic regions and end markets. This portfolio diversity is intended to mitigate the potential effects of negative economic events for particular companies, regions and industries. |
• | Capitalizing on Strong Transaction Sourcing Network.Our investment team seeks to leverage its extensive network of referral sources for investments in lower middle-market companies developed over the last ten years. Since 2002, we have originated and have been the lead investor in over 30 principal investment transactions. We have developed a reputation in our marketplace as a responsive, efficient and reliable source of financing, which has created a growing proprietary deal flow for us. |
• | Benefiting from Lower Cost of Capital.The Fund’s SBIC license has allowed it to issue SBA-guaranteed debentures. SBA-guaranteed debentures carry long-term fixed rates that are generally lower than rates on comparable bank and public debt. Because lower cost SBA leverage is, and will continue to be, a significant part of our capital base, our relative cost of debt capital should be lower than many of our competitors. |
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• | Proven Management Team with Meaningful Financial Commitment.We look for operationally-oriented management with direct industry experience and a successful track record. In addition, we expect the management team of each portfolio company to have meaningful equity ownership in the portfolio company to better align our respective economic interests. We believe management teams with these attributes are more likely to manage the companies in a manner that protects our debt investment and enhances the value of our equity investment. |
• | Established Companies with Positive Cash Flow.We seek to invest in established companies in the lower middle-market with sound historical financial performance. We typically focus on companies that have historically generated EBITDA of greater than $1.0 million and commensurate levels of free cash flow. We generally do not intend to invest in start-up companies or companies with speculative business plans. |
• | Defensible Competitive Advantages/Favorable Industry Position.We primarily focus on companies having competitive advantages in their respective markets and/or operating in industries with barriers to entry, which may help to protect their market position and profitability. |
• | Exit Alternatives.We expect that the primary means by which we exit our debt investments will be through the repayment of our investment from internally generated cash flow and/or refinancing. In addition, we seek to invest in companies whose business models and expected future cash flows may provide alternate methods of repaying our investment, such as through a strategic acquisition by other industry participants or a recapitalization. |
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• | a comprehensive financial model based on quantitative analysis of historical financial performance, projections and pro forma adjustments to determine the estimated internal rate of return; |
• | a brief industry and market analysis, importing direct industry expertise from other portfolio companies or investors; |
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• | preliminary qualitative analysis of the management team’s competencies and backgrounds; |
• | potential investment structures and pricing terms; and |
• | regulatory compliance. |
• | initial or additional site visits with management and key personnel; |
• | detailed review of historical and projected financial statements; |
• | operational reviews and analysis; |
• | interviews with customers and suppliers; |
• | detailed evaluation of company management, including background checks; |
• | review of material contracts; |
• | in-depth industry, market and strategy analysis; |
• | review by legal, environmental or other consultants, if applicable; and |
• | financial sponsor diligence, if applicable, including portfolio company and other reference checks. |
• | company history and overview; |
• | transaction overview, history and rationale, including an analysis of transaction strengths and risks; |
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• | analysis of key customers and suppliers and key contracts; |
• | a working capital analysis; |
• | an analysis of the company’s business strategy; |
• | a management background check and assessment; |
• | third-party accounting, legal, environmental or other due diligence findings; |
• | investment structure and expected returns; |
• | anticipated sources of repayment and potential exit strategies; |
• | pro forma capitalization and ownership; |
• | an analysis of historical financial results and key financial ratios; |
• | sensitivities to management’s financial projections; and |
• | detailed reconciliations of historical to pro forma results. |
• | Investment Rating 1 is used for investments that exceed expectations and with respect to which return of capital invested, collection of all interest, and a substantial capital gain are expected; |
• | Investment Rating 2 is used for investments that are performing in accordance with or above expectations and with respect to which the equity component, if any, has the potential to realize capital gain; |
• | Investment Rating 3 is used for investments that are generally performing in accordance with expectations and with respect to which a full return of original capital invested and collection of all interest is expected, but no capital gain can currently be foreseen; |
• | Investment Rating 4 is used for investments that are underperforming, have the potential for a realized loss and require closer monitoring; and |
• | Investment Rating 5 is used for investments performing significantly below expectations and where we expect a loss. |
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December 31, 2006 | December 31, 2007 | |||||||||||||||
Investments at | Percentage of | Investments at | Percentage of | |||||||||||||
Investment Rating | Fair Value | Total Portfolio | Fair Value | Total Portfolio | ||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
1 | $ | 31,686 | 41.6 | % | $ | 25,153 | 27.8 | % | ||||||||
2 | 23,581 | 30.9 | 35,771 | 39.6 | ||||||||||||
3 | 15,094 | 19.8 | 24,714 | 27.3 | ||||||||||||
4 | 5,848 | 7.7 | — | — | ||||||||||||
5 | — | — | 4,762 | 5.3 | ||||||||||||
Totals | $ | 76,209 | 100.0 | % | $ | 90,400 | 100.0 | % | ||||||||
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• | Our quarterly valuation process will begin with each portfolio company or investment being initially valued by the deal team responsible for the portfolio investment; |
• | Preliminary valuation conclusions will then be reviewed and discussed with senior management; |
• | The Audit Committee of our Board of Directors will review the preliminary valuations, and the deal team will consider and assess, as appropriate, any changes that may be required to the preliminary valuations to address any comments provided by the Audit Committee; |
• | The Board of Directors will assess the valuations and will ultimately determine the fair value of each investment in our portfolio in good faith; and |
• | An independent valuation firm engaged by the Board of Directors will perform certain mutually agreed limited procedures that we have identified and asked them to perform on a selection of our final portfolio company valuation conclusions. |
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(1) | Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company (as defined below), or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. | ||
(2) | Securities of any eligible portfolio company that we control. | ||
(3) | Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements. |
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(4) | Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company. | ||
(5) | Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities. | ||
(6) | Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment. |
(a) | is organized under the laws of, and has its principal place of business in, the United States; | ||
(b) | is not an investment company (other than a small business investment company wholly owned by the business development company) or a company that would be an investment company but for certain exclusions under the 1940 Act; and | ||
(c) | satisfies any of the following: |
(i) | does not have any class of securities that is traded on a national securities exchange; | ||
(ii) | is controlled by a business development company or a group of companies including a business development company and the business development company has an affiliated person who is a director of the eligible portfolio company; or | ||
(iii) | is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million. |
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• | continue to qualify as a BDC under the 1940 Act at all times during each taxable year; |
• | derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities, loans, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities (the “90% Income Test”); and |
• | diversify our holdings so that at the end of each quarter of the taxable year: |
• | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and | ||
• | no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships” (the “Diversification Tests”). |
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Item 1A. | Risk Factors |
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• | The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. We will be subject to a 4% nondeductible federal excise tax, however, to the extent that we do not satisfy certain additional minimum distribution requirements on a calendar-year basis. Because we use debt financing, we are subject to an asset coverage ratio requirement under the 1940 Act and may in the future become subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax. |
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• | The income source requirement will be satisfied if we obtain at least 90% of our income for each year from distributions, interest, gains from the sale of stock or securities or similar sources. |
• | The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses. |
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• | may have limited financial resources and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investment, as well as a corresponding decrease in the value of the equity components of our investments; |
• | may have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns; |
• | are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us; |
• | generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and |
• | generally have less publicly available information about their businesses, operations and financial condition. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and may lose all or part of our investment. |
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• | significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies; |
• | changes in regulatory policies or tax guidelines, particularly with respect to RICs, BDCs or SBICs; |
• | inability to obtain certain exemptive relief from the SEC; |
• | loss of RIC status or the Fund’s status as an SBIC; |
• | changes in earnings or variations in operating results; |
• | changes in the value of our portfolio of investments; |
• | any shortfall in our revenue or net income or any increase in losses from levels expected by investors or securities analysts; |
• | departure of our key personnel; and |
• | general economic trends and other external factors. |
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Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
High | Low | |||||||
Fiscal year 2007 | ||||||||
Fourth quarter (from October 5, 2007) | $ | 15.02 | $ | 13.60 |
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Date Declared | Record Date | Payment Date | Amount | |||
Fiscal year 2008 | ||||||
February 7, 2008 | February 15, 2008 | March 21, 2008 | $0.34(1) | |||
Fiscal year 2007 | ||||||
November 5, 2007 | November 16, 2007 | November 30, 2007 | $0.33(2) | |||
(1) | This quarterly dividend will be paid based upon the accumulated taxable income recognized by Main Street, including excess undistributed taxable income from 2007 that was carried forward for distribution during 2008. It is estimated that approximately 80% of this quarterly dividend will be designated as ordinary taxable income, with the remainder designated as long-term capital gain. | |
(2) | This quarterly dividend was comprised of ordinary income of $0.105 per share and long term capital gain of $0.225 per share. Ordinary dividend distributions from a RIC do not qualify for the 15% maximum tax rate on dividend income from domestic corporations and qualified foreign corporations except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations (which Main Street did not receive in 2007). |
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Among Main Street Capital Corporation, the Russell 2000 Index
and Main Street Peer Group
(For the Period October 5, 2007 to December 31, 2007)
(1) | Total return includes reinvestment of dividends through December 31, 2007. | |
(2) | The Main Street Peer Group index is composed of Triangle Capital Corporation, Prospect Capital Corporation, TICC Capital Corp, Kohlberg Capital Corporation and Patriot Capital Funding, Inc. |
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Number of Securities | ||||||||||||
Remaining Available for | ||||||||||||
Number of Securities to be | Weighted-Average | Future Issuance Under | ||||||||||
Issued Upon Exercise of | Exercise Price of | Equity Compensation Plans | ||||||||||
Outstanding Options, | Outstanding Options, | (Excluding Securities | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Reflected in Column(a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | — | $ | — | — | ||||||||
Equity compensation plans not approved by security holders | — | $ | — | 2,200,000 | (1) | |||||||
Total | — | $ | — | 2,200,000 | ||||||||
(1) | These shares of our common stock were authorized by our stockholders prior to the Offering. In accordance with a regulatory order we obtained from the SEC subsequent to the Offering, we intend to seek stockholder approval for the equity compensation plans pursuant to which these shares may be issued. |
Item 6. | Selected Financial Data |
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Years Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Statement of operations data: | ||||||||||||||||||||
Investment income: | ||||||||||||||||||||
Total interest, fee and dividend income | $ | 3,397 | $ | 4,452 | $ | 7,338 | $ | 9,013 | $ | 11,312 | ||||||||||
Interest from idle funds and other | 7 | 9 | 222 | 749 | 1,163 | |||||||||||||||
Total investment income | 3,404 | 4,461 | 7,560 | 9,762 | 12,475 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Management fees to affiliate | (1,722 | ) | (1,916 | ) | (1,929 | ) | (1,942 | ) | (1,500 | ) | ||||||||||
Interest | (113 | ) | (869 | ) | (2,064 | ) | (2,717 | ) | (3,246 | ) | ||||||||||
General and administrative | (135 | ) | (184 | ) | (197 | ) | (198 | ) | (512 | ) | ||||||||||
Professional costs related to initial public offering | — | — | — | — | (695 | ) | ||||||||||||||
Total expenses | (1,970 | ) | (2,969 | ) | (4,190 | ) | (4,857 | ) | (5,953 | ) | ||||||||||
Net investment income | 1,434 | 1,492 | 3,370 | 4,905 | 6,522 | |||||||||||||||
Total net realized gain (loss) from investments | (225 | ) | 1,171 | 1,488 | 2,430 | 4,692 | ||||||||||||||
Net realized income | 1,209 | 2,663 | 4,858 | 7,335 | 11,214 | |||||||||||||||
Total net change in unrealized appreciation (depreciation) from investments | 300 | 1,764 | 3,032 | 8,488 | (5,406 | ) | ||||||||||||||
Income tax provision | — | — | — | — | (3,263 | ) | ||||||||||||||
Net increase in net assets resulting from operations | $ | 1,509 | $ | 4,427 | $ | 7,890 | $ | 15,823 | $ | 2,545 | ||||||||||
Net investment income per common share – basic and diluted | N/A | N/A | N/A | N/A | $ | 0.76 | ||||||||||||||
Net realized income per common share – basic and diluted | N/A | N/A | N/A | N/A | $ | 1.31 | ||||||||||||||
Net increase in net assets resulting from operations per common share – basic and diluted | N/A | N/A | N/A | N/A | $ | 0.30 | ||||||||||||||
Weighted average shares of common stock outstanding – basic and diluted | N/A | N/A | N/A | N/A | 8,587,701 |
As of December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Balance sheet data: | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Total portfolio investments at fair value | $ | 19,920 | $ | 40,733 | $ | 53,795 | $ | 76,209 | $ | 108,025 | ||||||||||
Accumulated unearned income | (1,972 | ) | (2,761 | ) | (2,603 | ) | (2,498 | ) | (2,375 | ) | ||||||||||
Total portfolio investments net of accumulated unearned income | 17,948 | 37,972 | 51,192 | 73,711 | 105,650 | |||||||||||||||
Idle funds investments | — | — | — | — | 24,063 | |||||||||||||||
Cash and cash equivalents | 1,537 | 796 | 26,261 | 13,769 | 41,889 | |||||||||||||||
Other assets | 266 | 262 | 439 | 630 | 1,576 | |||||||||||||||
Deferred financing costs, net of accumulated amortization | 416 | 984 | 1,442 | 1,333 | 1,670 | |||||||||||||||
Total assets | $ | 20,167 | $ | 40,014 | $ | 79,334 | $ | 89,443 | $ | 174,848 | ||||||||||
Liabilities and net assets: | ||||||||||||||||||||
SBIC debentures | $ | 5,000 | $ | 22,000 | $ | 45,100 | $ | 45,100 | $ | 55,000 | ||||||||||
Deferred tax liability | — | — | — | — | 3,026 | |||||||||||||||
Interest payable | 60 | 354 | 771 | 855 | 1,063 | |||||||||||||||
Accounts payable and other liabilities | 139 | 422 | 194 | 216 | 610 | |||||||||||||||
Total liabilities | 5,199 | 22,776 | 46,065 | 46,171 | 59,699 | |||||||||||||||
Total net assets | 14,968 | 17,238 | 33,269 | 43,272 | 115,149 | |||||||||||||||
Total liabilities and net assets | $ | 20,167 | $ | 40,014 | $ | 79,334 | $ | 89,443 | $ | 174,848 | ||||||||||
Other data: | ||||||||||||||||||||
Weighted average effective yield on debt investments(1) | 16.2 | % | 15.3 | % | 15.3 | % | 15.0 | % | 14.3 | % | ||||||||||
Number of portfolio companies (3) | 8 | 14 | 19 | 24 | 27 | |||||||||||||||
Expense ratios (as percentage of average net assets): | ||||||||||||||||||||
Operating expenses(2) | 12.3 | % | 13.7 | % | 9.0 | % | 5.5 | % | 4.8 | % | ||||||||||
Interest expense | 0.7 | % | 5.7 | % | 8.8 | % | 7.0 | % | 5.7 | % |
(1) | Weighted-average effective yield is calculated based on our debt investments at the end of each period and includes amortization of deferred debt origination fees and accretion of original issue discount. | |
(2) | The ratio for the year ended December 31, 2007 reflects the impact of professional costs related to the Offering. These costs were 25.7 % of operating expenses for the year. | |
(3) | Excludes the investment in affiliated Investment Manager, as referenced in “Formation Transactions” and in the notes to the financial statements elsewhere in this Annual Report on Form 10-K. |
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | MSCC acquired 100% of the limited partnership interests in the Fund, which became a wholly- owned consolidated subsidiary of MSCC — the Fund retained its SBIC license, continued to hold its existing investments, and will make new investments with available funds; |
• | MSCC acquired 100% of the equity interests in the General Partner, which became a wholly owned consolidated subsidiary of MSCC; and |
• | MSCC acquired 100% of the equity interests in the Investment Manager. The Investment Manager became a wholly owned portfolio company of MSCC as the Investment Manager does not conduct substantially all of its investment management activities for Main Street and its subsidiaries. |
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December 31, | ||||||||
Cost: | 2006 | 2007 | ||||||
First lien debt | 77.1 | % | 81.7 | % | ||||
Second lien debt | 11.8 | 6.3 | ||||||
Equity | 7.6 | 10.3 | ||||||
Equity warrants | 3.5 | 1.7 | ||||||
100.0 | % | 100.0 | % | |||||
December 31, | ||||||||
Fair Value: | 2006 | 2007 | ||||||
First lien debt | 63.9 | % | 70.6 | % | ||||
Second lien debt | 9.7 | 3.5 | ||||||
Equity | 12.6 | 18.1 | ||||||
Equity warrants | 13.8 | 7.8 | ||||||
100.0 | % | 100.0 | % | |||||
December 31, | ||||||||
Cost: | 2006 | 2007 | ||||||
Southwest | 39.9 | % | 31.9 | % | ||||
West | 24.8 | 36.9 | ||||||
Northeast | 14.7 | 11.4 | ||||||
Southeast | 13.8 | 13.9 | ||||||
Midwest | 6.8 | 5.9 | ||||||
100.0 | % | 100.0 | % | |||||
December 31, | ||||||||
Fair Value: | 2006 | 2007 | ||||||
Southwest | 47.2 | % | 41.0 | % | ||||
West | 20.8 | 32.9 | ||||||
Northeast | 11.1 | 9.1 | ||||||
Southeast | 13.1 | 10.4 | ||||||
Midwest | 7.8 | 6.6 | ||||||
100.0 | % | 100.0 | % | |||||
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December 31, | ||||||||
Cost: | 2006 | 2007 | ||||||
Manufacturing | 15.1 | % | 12.4 | % | ||||
Agricultural services | — | 11.4 | ||||||
Electronics manufacturing | 5.2 | 9.6 | ||||||
Construction/industrial minerals | 11.7 | 9.0 | ||||||
Custom wood products | 6.3 | 8.3 | ||||||
Transportation/logistics | 9.6 | 6.6 | ||||||
Industrial Equipment | — | 6.5 | ||||||
Health care services | 5.0 | 5.9 | ||||||
Metal Fabrication | — | 4.7 | ||||||
Health care products | 8.2 | 4.3 | ||||||
Restaurant | 5.3 | 3.4 | ||||||
Professional services | 4.8 | 3.3 | ||||||
Retail | 4.3 | 3.2 | ||||||
Consumer products | 3.2 | 2.6 | ||||||
Equipment rental | 2.9 | 2.6 | ||||||
Building products | 3.9 | 2.4 | ||||||
Distribution | 11.6 | 2.2 | ||||||
Information services | 2.4 | 1.2 | ||||||
Industrial services | 0.5 | 0.4 | ||||||
Total | 100.0 | % | 100.0 | % | ||||
December 31, | ||||||||
Fair Value: | 2006 | 2007 | ||||||
Construction/industrial minerals | 15.9 | % | 12.8 | % | ||||
Agricultural services | — | 10.4 | ||||||
Manufacturing | 14.1 | 9.8 | ||||||
Electronics manufacturing | 4.9 | 9.7 | ||||||
Custom wood products | 5.2 | 7.5 | ||||||
Transportation/logistics | 9.7 | 6.6 | ||||||
Health care services | 4.1 | 6.0 | ||||||
Industrial Equipment | — | 5.9 | ||||||
Restaurant | 5.3 | 4.4 | ||||||
Metal Fabrication | — | 4.3 | ||||||
Health care products | 8.3 | 4.1 | ||||||
Professional services | 4.4 | 4.1 | ||||||
Retail | 3.6 | 3.4 | ||||||
Industrial services | 2.4 | 2.8 | ||||||
Distribution | 12.3 | 2.4 | ||||||
Equipment rental | 2.3 | 2.4 | ||||||
Building products | 3.2 | 2.2 | ||||||
Information services | 1.8 | 1.2 | ||||||
Consumer products | 2.5 | — | ||||||
Total | 100.0 | % | 100.0 | % | ||||
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December 31, 2006 | December 31, 2007 | |||||||||||||||
Investments at | Percentage of | Investments at | Percentage of | |||||||||||||
Investment Rating | Fair Value | Total Portfolio | Fair Value | Total Portfolio | ||||||||||||
1 | $ | 31,686 | 41.6 | % | $ | 25,153 | 27.8 | % | ||||||||
2 | 23,581 | 30.9 | 35,771 | 39.6 | ||||||||||||
3 | 15,094 | 19.8 | 24,714 | 27.3 | ||||||||||||
4 | 5,848 | 7.7 | — | — | ||||||||||||
5 | — | — | 4,762 | 5.3 | ||||||||||||
Totals | $ | 76,209 | 100.0 | % | $ | 90,400 | 100.0 | % | ||||||||
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40
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41
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42
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2013 and | ||||||||||||||||||||||||||||
Total | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | ||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||
SBIC debentures payable | $ | 55,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 55,000 | ||||||||||||||
Interest due on SBIC debentures | 24,684 | 3,188 | 3,179 | 3,179 | 3,179 | 3,188 | 8,771 | |||||||||||||||||||||
Total | $ | 79,684 | $ | 3,188 | $ | 3,179 | $ | 3,179 | $ | 3,179 | $ | 3,188 | $ | 63,771 | ||||||||||||||
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Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
Item 8. | Financial Statements and Supplementary Data |
46 | ||||
47 | ||||
48 | ||||
49 | ||||
50 | ||||
51 | ||||
56 | ||||
45
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Main Street Capital Corporation
March 18, 2008
46
Table of Contents
Balance Sheets
December 31, | ||||||||
2007 | 2006 | |||||||
(Consolidated) | (Combined) | |||||||
ASSETS | ||||||||
Portfolio investments at fair value: | ||||||||
Control investments (cost: $44,169,431 and $33,312,337 as of December 31, 2007 and 2006, respectively) | $ | 49,161,952 | $ | 42,429,000 | ||||
Affiliate investments (cost: $34,211,440 and $24,328,596 as of December 31, 2007 and 2006, respectively) | 37,412,907 | 28,822,245 | ||||||
Non-Control/Non-Affiliate investments (cost: $3,465,590 and $4,983,015 as of December 31, 2007 and 2006, respectively) | 3,825,590 | 4,958,183 | ||||||
Investment in affiliated Investment Manager (cost: $18,000,000) | 17,625,000 | — | ||||||
Total portfolio investments (cost: $99,846,461 and $62,623,948 as of December 31, 2007 and 2006, respectively) | 108,025,449 | 76,209,428 | ||||||
Accumulated unearned income | (2,375,035 | ) | (2,498,427 | ) | ||||
Total portfolio investments net of accumulated unearned income | 105,650,414 | 73,711,001 | ||||||
Idle funds investments | 24,063,261 | — | ||||||
Cash and cash equivalents | 41,889,324 | 13,768,719 | ||||||
Other assets | 1,574,888 | 630,058 | ||||||
Deferred financing costs (net of accumulated amortization of $529,952 and $343,846 as of December 31, 2007 and 2006, respectively) | 1,670,135 | 1,333,654 | ||||||
Total assets | $ | 174,848,022 | $ | 89,443,432 | ||||
LIABILITIES | ||||||||
SBIC debentures | $ | 55,000,000 | $ | 45,100,000 | ||||
Deferred tax liability | 3,025,672 | — | ||||||
Interest payable | 1,062,672 | 854,941 | ||||||
Accounts payable and other liabilities | 610,470 | 215,960 | ||||||
Total liabilities | 59,698,814 | 46,170,901 | ||||||
Commitments and contingencies | ||||||||
NET ASSETS | ||||||||
Common stock, $0.01 par value per share (150,000,000 shares authorized, 8,959,718 shares issued and outstanding as of December 31, 2007) | 89,597 | — | ||||||
Additional paid in capital | 104,076,033 | — | ||||||
Undistributed net realized income | 6,067,131 | 4,266,043 | ||||||
Net unrealized appreciation from investments, net of income taxes | 4,916,447 | 13,585,479 | ||||||
Members’ capital (General Partner) | — | 181,770 | ||||||
Limited Partners’ capital | — | 25,239,239 | ||||||
Total net assets | 115,149,208 | 43,272,531 | ||||||
Total liabilities and net assets | $ | 174,848,022 | $ | 89,443,432 | ||||
Net asset value per share | $ | 12.85 | N/A | |||||
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Statements of Operations
Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Consolidated) | (Combined) | |||||||||||
INVESTMENT INCOME: | ||||||||||||
Interest, fee and dividend income: | ||||||||||||
Control investments | $ | 5,201,382 | $ | 4,295,354 | $ | 3,335,879 | ||||||
Affiliate investments | 5,390,655 | 3,573,570 | 3,149,259 | |||||||||
Non-Control/Non-Affiliate investments | 720,076 | 1,144,213 | 852,841 | |||||||||
Total interest, fee and dividend income | 11,312,113 | 9,013,137 | 7,337,979 | |||||||||
Interest from idle funds and other | 1,162,865 | 748,670 | 221,765 | |||||||||
Total investment income | 12,474,978 | 9,761,807 | 7,559,744 | |||||||||
EXPENSES: | ||||||||||||
Management fees to affiliate | (1,499,937 | ) | (1,942,032 | ) | (1,928,763 | ) | ||||||
Interest | (3,245,839 | ) | (2,717,236 | ) | (2,063,726 | ) | ||||||
General and administrative | (512,253 | ) | (197,979 | ) | (197,192 | ) | ||||||
Professional costs related to initial public offering | (695,250 | ) | — | — | ||||||||
Total expenses | (5,953,279 | ) | (4,857,247 | ) | (4,189,681 | ) | ||||||
NET INVESTMENT INCOME | 6,521,699 | 4,904,560 | 3,370,063 | |||||||||
NET REALIZED GAIN (LOSS) FROM INVESTMENTS: | ||||||||||||
Control investments | 1,802,713 | (805,469 | ) | 221,837 | ||||||||
Affiliate investments | 3,160,034 | 1,940,794 | 623,681 | |||||||||
Non-Control/Non-Affiliate investments | (270,538 | ) | 1,294,598 | — | ||||||||
Derivative Instrument and related investment | — | — | 642,208 | |||||||||
Total net realized gain (loss) from investments | 4,692,209 | 2,429,923 | 1,487,726 | |||||||||
NET REALIZED INCOME | 11,213,908 | 7,334,483 | 4,857,789 | |||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS: | ||||||||||||
Control investments | (3,075,392 | ) | 6,631,698 | 2,526,516 | ||||||||
Affiliate investments | (2,340,933 | ) | 2,831,649 | 347,000 | ||||||||
Non-Control/Non-Affiliate investments | 384,832 | (974,833 | ) | 685,000 | ||||||||
Investment in affiliated Investment Manager | (375,000 | ) | — | — | ||||||||
Derivative Instrument and related investment | — | — | (526,242 | ) | ||||||||
Total net change in unrealized appreciation (depreciation) from investments | (5,406,493 | ) | 8,488,514 | 3,032,274 | ||||||||
Income tax provision | (3,262,539 | ) | — | — | ||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,544,876 | $ | 15,822,997 | $ | 7,890,063 | ||||||
�� | ||||||||||||
NET INVESTMENT INCOME PER COMMON SHARE-BASIC AND DILUTED | $ | 0.76 | N/A | N/A | ||||||||
NET REALIZED INCOME PER COMMON SHARE-BASIC AND DILUTED | $ | 1.31 | N/A | N/A | ||||||||
DIVIDENDS/DISTRIBUTIONS PER COMMON SHARE | $ | 1.10 | N/A | N/A | ||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE-BASIC AND DILUTED | $ | 0.30 | N/A | N/A | ||||||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING- BASIC AND DILUTED | 8,587,701 | N/A | N/A | |||||||||
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Statements of Changes in Net Assets
Net Unrealized | ||||||||||||||||||||||||||||||||
Appreciation from | ||||||||||||||||||||||||||||||||
Members' | Limited | Common Stock | Additional | Undistributed | Investments, | Total | ||||||||||||||||||||||||||
Capital | Partners' | Number | Par | Paid In | Net Realized | net of | Net | |||||||||||||||||||||||||
(General Partner) | Capital | of Shares | Value | Capital | Income | Income Taxes | Assets | |||||||||||||||||||||||||
Balances at December 31, 2004 | $ | 118,505 | $ | 14,453,688 | — | $ | — | $ | — | $ | 601,004 | $ | 2,064,691 | $ | 17,237,888 | |||||||||||||||||
Capital contributions | 61,437 | 10,962,290 | — | — | — | — | — | 11,023,727 | ||||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | (2,882,936 | ) | — | (2,882,936 | ) | ||||||||||||||||||||||
Net increase resulting from operations: | — | — | — | — | — | 4,857,789 | 3,032,274 | 7,890,063 | ||||||||||||||||||||||||
Balances at December 31, 2005 | 179,942 | 25,415,978 | — | — | — | 2,575,857 | 5,096,965 | 33,268,742 | ||||||||||||||||||||||||
Capital contributions | 1,828 | 353,261 | — | — | — | — | — | 355,089 | ||||||||||||||||||||||||
Distributions to partners | — | (530,000 | ) | — | — | — | (5,644,297 | ) | — | (6,174,297 | ) | |||||||||||||||||||||
Net increase resulting from operations: | — | — | — | — | — | 7,334,483 | 8,488,514 | 15,822,997 | ||||||||||||||||||||||||
Balances at December 31, 2006 | 181,770 | 25,239,239 | — | — | — | 4,266,043 | 13,585,479 | 43,272,531 | ||||||||||||||||||||||||
Capital contributions | — | 300,081 | — | — | — | — | — | 300,081 | ||||||||||||||||||||||||
Distributions to partners | — | — | — | — | — | (6,500,000 | ) | — | (6,500,000 | ) | ||||||||||||||||||||||
Formation Transactions | (181,770 | ) | (25,539,320 | ) | 4,525,726 | 45,257 | 43,675,833 | — | — | 18,000,000 | ||||||||||||||||||||||
Initial capitalization | — | — | 1,000 | 10 | 990 | — | — | 1,000 | ||||||||||||||||||||||||
Public offering of common stock | — | — | 4,300,000 | 43,000 | 60,139,997 | — | — | 60,182,997 | ||||||||||||||||||||||||
Costs related to offering | — | — | — | — | (1,642,573 | ) | — | — | (1,642,573 | ) | ||||||||||||||||||||||
Dividends paid to stockholders | — | — | — | — | — | (2,912,820 | ) | — | (2,912,820 | ) | ||||||||||||||||||||||
Dividend reinvestment | — | — | 132,992 | 1,330 | 1,901,786 | — | — | 1,903,116 | ||||||||||||||||||||||||
Net increase resulting from operations | — | — | — | — | — | 11,213,908 | (8,669,032 | ) | 2,544,876 | |||||||||||||||||||||||
Balances at December 31, 2007 | $ | — | $ | — | 8,959,718 | $ | 89,597 | $ | 104,076,033 | $ | 6,067,131 | $ | 4,916,447 | $ | 115,149,208 | |||||||||||||||||
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Statements of Cash Flows
For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Consolidated) | (Combined) | (Combined) | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net increase in net assets resulting from operations | $ | 2,544,876 | $ | 15,822,997 | $ | 7,890,063 | ||||||
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: | ||||||||||||
Accretion of unearned income | (998,069 | ) | (1,380,351 | ) | (1,251,066 | ) | ||||||
Net payment-in-kind interest accrual | (260,806 | ) | (216,805 | ) | (144,150 | ) | ||||||
Amortization of deferred financing costs | 186,106 | 157,850 | 120,225 | |||||||||
Net change in unrealized (appreciation) depreciation from investments | 5,406,493 | (8,488,514 | ) | (3,032,274 | ) | |||||||
Net realized gain from investments | (4,692,209 | ) | (2,429,923 | ) | (1,487,726 | ) | ||||||
Changes in other assets and liabilities: | ||||||||||||
Interest receivable | (407,347 | ) | (93,480 | ) | (182,324 | ) | ||||||
Other assets | (469,598 | ) | 2,107 | 4,172 | ||||||||
Deferred tax liability | 3,025,672 | — | — | |||||||||
Interest payable | 207,731 | 83,459 | 417,325 | |||||||||
Accounts payable and other liabilities | 394,510 | 76,543 | 103,670 | |||||||||
Deferred debt origination fees received | 467,558 | 709,980 | 535,250 | |||||||||
Net cash provided by operating activities | 5,404,917 | 4,243,863 | 2,973,165 | |||||||||
CASH FLOWS FROM INVESTMENT ACTIVITIES | ||||||||||||
Investments in portfolio companies | (29,479,023 | ) | (28,088,005 | ) | (19,727,500 | ) | ||||||
Principal payments received on loans and debt securities | 9,614,338 | 12,199,956 | 10,322,470 | |||||||||
Proceeds from sale of equity securities and related notes | 5,934,420 | 5,021,313 | 1,117,143 | |||||||||
Proceeds from derivative instrument | — | — | 115,966 | |||||||||
Investments of idle funds | (24,063,261 | ) | — | — | ||||||||
Net cash used in investing activities | (37,993,526 | ) | (10,866,736 | ) | (8,171,921 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from initial public offering/capitalization | 60,183,997 | — | — | |||||||||
Proceeds from capital contributions | 300,081 | 355,089 | 11,023,727 | |||||||||
Distribution to members and partners | (6,500,000 | ) | (6,174,297 | ) | (2,882,936 | ) | ||||||
Dividends paid to stockholders | (1,009,704 | ) | — | — | ||||||||
Proceeds from issuance of SBIC debentures | 9,900,000 | — | 23,100,000 | |||||||||
Payment of deferred loan costs and SBIC debenture fees | (522,587 | ) | (50,000 | ) | (577,500 | ) | ||||||
Payment of initial public offering costs | (1,642,573 | ) | — | — | ||||||||
Net cash provided by (used in) financing activities | 60,709,214 | (5,869,208 | ) | 30,663,291 | ||||||||
Net increase (decrease) in cash and cash equivalents | 28,120,605 | (12,492,081 | ) | 25,464,535 | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 13,768,719 | 26,260,800 | 796,265 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 41,889,324 | $ | 13,768,719 | $ | 26,260,800 | ||||||
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CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Portfolio Company/Type of Investment (1) (2) | Industry | Principal (6) | Cost (6) | Fair Value | ||||||||||||
Control Investments(3) | ||||||||||||||||
Café Brazil, LLC | Casual Restaurant | |||||||||||||||
12% Secured Debt (Maturity — April 20, 2009) | Group | $ | 2,750,000 | $ | 2,750,000 | $ | 2,750,000 | |||||||||
Member Units (7) (Fully diluted 42.3%) | 41,837 | 1,250,000 | ||||||||||||||
2,791,837 | 4,000,000 | |||||||||||||||
CBT Nuggets, LLC | Produces and Sells | |||||||||||||||
Prime plus 2% Secured Debt (Maturity — June 1, 2011) | IT Certification | 360,000 | 360,000 | 360,000 | ||||||||||||
14% Secured Debt (Maturity — June 1, 2011) | Training Videos | 1,860,000 | 1,860,000 | 1,860,000 | ||||||||||||
Member Units (Fully diluted 29.1%) | 432,000 | 1,145,000 | ||||||||||||||
Warrants (Fully diluted 10.5%) | 72,000 | 345,000 | ||||||||||||||
2,724,000 | 3,710,000 | |||||||||||||||
Gulf Manufacturing, LLC | Specialty Metal | |||||||||||||||
Prime plus 1% Secured Debt (Maturity — August 31, 2012) | Fabrication | 1,200,000 | 1,200,000 | 1,200,000 | ||||||||||||
13% Secured Debt (Maturity — August 31, 2012) | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||||||
Member Units (Fully diluted 18.4%) | 472,000 | 472,000 | ||||||||||||||
Warrants (Fully diluted 8.4%) | 160,000 | 250,000 | ||||||||||||||
3,832,000 | 3,922,000 | |||||||||||||||
Hawthorne Customs & Dispatch Services, LLC | Transportation/ | |||||||||||||||
13% Secured Debt (Maturity — January 31, 2011) | Logistics | 1,350,000 | 1,350,000 | 1,350,000 | ||||||||||||
Member Units (7) (Fully diluted 27.8%) | 375,000 | 435,000 | ||||||||||||||
Warrants (Fully diluted 16.5%) | 37,500 | 230,000 | ||||||||||||||
1,762,500 | 2,015,000 | |||||||||||||||
Hayden Acquisition, LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — March 9, 2009) | Utility Structures | 1,955,000 | 1,955,000 | 1,955,000 | ||||||||||||
Hydratec Holdings, LLC | Agricultural Services | |||||||||||||||
12.5% Secured Debt (Maturity — October 31, 2012) | 5,700,000 | 5,700,000 | 5,700,000 | |||||||||||||
Prime plus 1% Secured Debt (Maturity — October 31, 2012) | 1,845,244 | 1,845,244 | 1,845,244 | |||||||||||||
Member Units (Fully diluted 60%) | 1,800,000 | 1,800,000 | ||||||||||||||
9,345,244 | 9,345,244 | |||||||||||||||
Jensen Jewelers of Idaho, LLC | Retail Jewelry | |||||||||||||||
Prime Plus 2% Secured Debt (Maturity — November 14, 2011) | 1,200,000 | 1,200,000 | 1,200,000 | |||||||||||||
13% current / 6% PIK Secured Debt (Maturity — November 14, 2011) | 1,069,457 | 1,069,457 | 1,069,457 | |||||||||||||
Member Units (7) (Fully diluted 25.1%) | 376,000 | 815,000 | ||||||||||||||
2,645,457 | 3,084,457 | |||||||||||||||
Magna Card, Inc. | Wholesale/Consumer | |||||||||||||||
12% current / 0.4% PIK Secured Debt (Maturity — September 30, 2010) | Magnetic Products | 2,021,079 | 2,021,079 | — | ||||||||||||
Warrants (Fully diluted 35.8%) | 100,000 | — | ||||||||||||||
2,121,079 | — | |||||||||||||||
Quest Design & Production, LLC | Design and Fabrication | |||||||||||||||
8% current / 5% PIK Secured Debt (Maturity — December 1, 2010) | of Custom Display | 3,991,542 | 3,991,542 | 3,991,542 | ||||||||||||
Warrants (Fully diluted 26.0%) | Systems | 40,000 | 40,000 | |||||||||||||
4,031,542 | 4,031,542 | |||||||||||||||
TA Acquisition Group, LP | Processor of | |||||||||||||||
12% Secured Debt (Maturity — July 29, 2010) | Construction | 1,870,000 | 1,870,000 | 1,870,000 | ||||||||||||
Partnership Interest (7) (Fully diluted 18.3%) | Aggregates | 357,500 | 3,435,000 | |||||||||||||
Warrants (Fully diluted 18.3%) | 82,500 | 3,450,000 | ||||||||||||||
2,310,000 | 8,755,000 | |||||||||||||||
Technical Innovations, LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — October 31, 2009) | Specialty Cutting | 787,500 | 787,500 | 787,500 | ||||||||||||
Prime Secured Debt (Maturity — October 31, 2009) | Tools and Punches | 262,500 | 262,500 | 262,500 | ||||||||||||
1,050,000 | 1,050,000 | |||||||||||||||
Universal Scaffolding & Equipment, LLC | Manufacturer of | |||||||||||||||
Prime plus 1% Secured Debt (Maturity — August 16, 2012) | Scaffolding and | 1,122,333 | 1,122,333 | 1,122,333 | ||||||||||||
13% current / 5% PIK Secured Debt (Maturity — August 16, 2012) | Shoring Equipment | 3,196,376 | 3,196,376 | 3,196,376 | ||||||||||||
Member Units (Fully Diluted 18.4%) | 992,063 | 1,025,000 | ||||||||||||||
5,310,772 | 5,343,709 | |||||||||||||||
Wicks N’ More, LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — April 26, 2011) | High-end Candles | 3,720,000 | 3,720,000 | 1,950,000 | ||||||||||||
Member Units (Fully diluted 11.5%) | 360,000 | — | ||||||||||||||
Warrants (Fully diluted 21.3%) | 210,000 | — | ||||||||||||||
4,290,000 | 1,950,000 | |||||||||||||||
Subtotal Control Investments | 44,169,431 | 49,161,952 | ||||||||||||||
See accompanying notes to consolidated financial statements.
51
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CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Portfolio Company/Type of Investment (1) (2) | Industry | Principal (6) | Cost (6) | Fair Value | ||||||||||||
Affiliate Investments(4) | ||||||||||||||||
Advantage Millwork Company, Inc. | Manufacturer/Distributor | |||||||||||||||
12% Secured Debt (Maturity — February 5, 2012) | of Wood Doors | 2,666,667 | 2,666,667 | 2,666,667 | ||||||||||||
Warrants (Fully diluted 10.89%) | 87,120 | 87,120 | ||||||||||||||
2,753,787 | 2,753,787 | |||||||||||||||
American Sensor Technologies, Inc. | Manufacturer of | |||||||||||||||
Prime plus 0.5% Secured Debt (Maturity — May 31, 2010) | Commercial/ | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||
Warrants (Fully diluted 20.0%) | Industrial Sensors | 50,000 | 750,000 | |||||||||||||
3,550,000 | 4,250,000 | |||||||||||||||
Carlton Global Resources, LLC | Processor of | |||||||||||||||
13% PIK Secured Debt (Maturity — November 15, 2011) | Industrial Minerals | 4,687,777 | 4,687,777 | 2,812,667 | ||||||||||||
Member Units (Fully diluted 8.5%) | 400,000 | — | ||||||||||||||
5,087,777 | 2,812,667 | |||||||||||||||
Houston Plating & Coatings, LLC | Plating & Industrial | |||||||||||||||
Prime plus 2% Secured Debt (Maturity — July 19, 2011) | Coating Services | 100,000 | 100,000 | 100,000 | ||||||||||||
Member Units (7) (Fully diluted 11.8%) | 210,000 | 2,450,000 | ||||||||||||||
310,000 | 2,550,000 | |||||||||||||||
KBK Industries, LLC | Specialty Manufacturer | |||||||||||||||
14% Secured Debt (Maturity — January 23, 2011) | of Oilfield and | 3,937,500 | 3,937,500 | 3,937,500 | ||||||||||||
8% Secured Debt (Maturity — July 1, 2009) | Industrial Products | 623,063 | 623,063 | 623,063 | ||||||||||||
Prime Plus 2% Secured Debt (Maturity — January 31, 2008) | 75,000 | 686,250 | ||||||||||||||
Member Units (7) (Fully diluted 14.5%) | 187,500 | 700,000 | ||||||||||||||
4,823,063 | 5,946,813 | |||||||||||||||
Laurus Healthcare, LP | Healthcare Facilities | |||||||||||||||
13% Secured Debt (Maturity — May 7, 2009) | 3,010,000 | 3,010,000 | 3,010,000 | |||||||||||||
Warrants (Fully diluted 18.2%) | 105,000 | 715,000 | ||||||||||||||
3,115,000 | 3,725,000 | |||||||||||||||
National Trench Safety, LLC | Trench & Traffic | |||||||||||||||
10% PIK debt (Maturity — April 16, 2014) | Safety Equipment | 365,334 | 365,334 | 365,334 | ||||||||||||
Member Units (Fully diluted 10.9%) | 1,792,308 | 1,792,308 | ||||||||||||||
2,157,642 | 2,157,642 | |||||||||||||||
Pulse Systems, LLC | Manufacturer of | |||||||||||||||
14% Secured Debt (Maturity — June 1, 2009) | Components for | 2,307,498 | 2,307,498 | 2,307,498 | ||||||||||||
Warrants (Fully diluted 6.6%) | Medical Devices | 118,000 | 350,000 | |||||||||||||
2,425,498 | 2,657,498 | |||||||||||||||
Transportation General, Inc. | Taxi Cab/Transportation | |||||||||||||||
13% Secured Debt (Maturity — May 31, 2010) | Services | 3,600,000 | 3,600,000 | 3,600,000 | ||||||||||||
Warrants (Fully diluted 24.0%) | 70,000 | 340,000 | ||||||||||||||
3,670,000 | 3,940,000 | |||||||||||||||
Turbine Air Systems, Ltd. | Commercial/Industrial | |||||||||||||||
12% Secured Debt (Maturity — October 11, 2011) | Chilling Systems | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Vision Interests, Inc. | Manufacturer/ | |||||||||||||||
13% Secured Debt (Maturity — June 5, 2012) | Installer of Commercial | 3,760,000 | 3,760,000 | 3,760,000 | ||||||||||||
Common stock (Fully diluted 8.9%) | Signage | 372,000 | 372,000 | |||||||||||||
Warrants (Fully diluted 11.2%) | 160,000 | 375,000 | ||||||||||||||
4,292,000 | 4,507,000 | |||||||||||||||
WorldCall, Inc. | Telecommunication/ | |||||||||||||||
13% Secured Debt (Maturity — October 22, 2009) | Information Services | 782,500 | 782,500 | 782,500 | ||||||||||||
Common stock (Fully diluted 6.22%) | 169,173 | 180,000 | ||||||||||||||
Warrants (Fully diluted 13.4%) | 75,000 | 150,000 | ||||||||||||||
1,026,673 | 1,112,500 | |||||||||||||||
Subtotal Affiliate Investments | 34,211,440 | 37,412,907 | ||||||||||||||
See accompanying notes to consolidated financial statements.
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CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Portfolio Company/Type of Investment (1) (2) | Industry | Principal (6) | Cost (6) | Fair Value | ||||||||||||
Non-Control/Non-Affiliate Investments(5): | ||||||||||||||||
East Teak Fine Hardwoods, Inc. | Hardwood Products | |||||||||||||||
13% Current/5.5% PIK Secured Debt (Maturity — April 13, 2011) | 1,651,028 | 1,651,028 | 1,651,028 | |||||||||||||
Common Stock (Fully diluted 3.3%) | 130,000 | 490,000 | ||||||||||||||
1,781,028 | 2,141,028 | |||||||||||||||
Support Systems Homes, Inc. | Manages Substance | |||||||||||||||
14% Current/4% PIK Secured Debt (Maturity — June 5, 2012) | Abuse Treatment | 1,525,674 | 1,525,674 | 1,525,674 | ||||||||||||
8% Secured Debt (Maturity — June 5, 2012) | Centers | 158,888 | 158,888 | 158,888 | ||||||||||||
1,684,562 | 1,684,562 | |||||||||||||||
Subtotal Non-Control/Non-Affiliate Investments | 3,465,590 | 3,825,590 | ||||||||||||||
Main Street Capital Partners, LLC (Investment Manager) | Asset Management | |||||||||||||||
100% of Membership Interests | 18,000,000 | 17,625,000 | ||||||||||||||
Total Portfolio Investments, December 31, 2007 | $ | 99,846,461 | $ | 108,025,449 | ||||||||||||
Accumulated unearned income | $ | (2,375,035 | ) | |||||||||||||
Total Portfolio Investments net of accumulated unearned income | $ | 105,650,414 | ||||||||||||||
Idle Fund Investments | Investments in U.S. | |||||||||||||||
4.691% Current Federal Home Loan Bank Discount Note (Maturity — April 11, 2008) | Agency Securities | 3,500,000 | $ | 3,421,791 | $ | 3,421,791 | ||||||||||
4.691% Current Federal National Mortgage Association Discount Note (Maturity — April 2, 2008) | 3,500,000 | 3,425,490 | 3,425,490 | |||||||||||||
4.675% Current Federal Home Loan Bank Discount Note (Maturity — March 20, 2008) | 3,500,000 | 3,431,089 | 3,431,089 | |||||||||||||
4.668% Current Federal Home Loan Bank Discount Note (Maturity — March 5, 2008) | 3,500,000 | 3,437,408 | 3,437,408 | |||||||||||||
4.673% Current Federal Home Loan Bank Discount Note (Maturity — February 20, 2008) | 3,500,000 | 3,443,197 | 3,443,197 | |||||||||||||
4.77% Current Federal Home Loan Mortgage Corp Discount Note (Maturity — February 7, 2008) | 3,500,000 | 3,448,948 | 3,448,948 | |||||||||||||
4.64% Current Federal National Mortgage Association Discount Note (Maturity — January 23, 2008) | 3,500,000 | 3,455,338 | 3,455,338 | |||||||||||||
Total Idle Fund Investments, December 31, 2007 | $ | 24,063,261 | $ | 24,063,261 | ||||||||||||
(1) | All debt investments are income producing. Equity and warrants are non-income producing, unless otherwise noted | |
(2) | See footnote C for summary geographic location of portfolio companies | |
(3) | Control investments are defined by the Investment Company Act of 1940, as amended (“1940 Act”), as investments in companies in which more than 25% of the voting securities are owned or where greater than 50% of the board representation is maintained. | |
(4) | Affiliate investments are defined by the 1940 Act as those Non-Control investments in companies in which between 5% and 25% of the voting securities are owned. | |
(5) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments or Affiliate Investments | |
(6) | Net of prepayments. | |
(7) | Income producing through payment of dividends or distributions. |
See accompanying notes to consolidated financial statements.
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COMBINED SCHEDULE OF INVESTMENTS
December 31, 2006
Portfolio Company/Type of Investment (1) (2) | Industry | Principal(6) | Cost(6) | Fair Value | ||||||||||||
Control Investments(3) | ||||||||||||||||
Café Brazil, LLC | Casual Restaurant | |||||||||||||||
12% Secured Debt (Maturity — April 20, 2009) | Group | $ | 3,150,000 | $ | 3,150,000 | $ | 3,150,000 | |||||||||
Member Units(7) (Fully diluted 41.0%) | 41,837 | 900,000 | ||||||||||||||
3,191,837 | 4,050,000 | |||||||||||||||
CBT Nuggets, LLC | Produces and sells | |||||||||||||||
Prime plus 2% Secured Debt (Maturity — June 1, 2011) | IT Certification | 660,000 | 660,000 | 660,000 | ||||||||||||
14% Secured Debt (Maturity — June 1, 2011) | Training Videos | 1,860,000 | 1,860,000 | 1,860,000 | ||||||||||||
Member Units (Fully diluted 29.1%) | 432,000 | 610,000 | ||||||||||||||
Warrants (Fully diluted 10.5%) | 72,000 | 200,000 | ||||||||||||||
3,024,000 | 3,330,000 | |||||||||||||||
Hawthorne Customs & Dispatch Services, LLC | Transportation/ | |||||||||||||||
13% Secured Debt (Maturity — January 31, 2011) | Logistics | 1,650,000 | 1,650,000 | 1,650,000 | ||||||||||||
Member Units(7) (Fully diluted 27.8%) | 375,000 | 950,000 | ||||||||||||||
Warrants (Fully diluted 16.5%) | 37,500 | 500,000 | ||||||||||||||
2,062,500 | 3,100,000 | |||||||||||||||
Hayden Acquisition, LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — March 9, 2009) | Utility Structures | 2,420,000 | 2,420,000 | 2,420,000 | ||||||||||||
Jensen Jewelers of Idaho, LLC | Retail Jewelry | |||||||||||||||
Prime Plus 2% Secured Debt (Maturity — November 14, 2011) | 1,340,000 | 1,340,000 | 1,340,000 | |||||||||||||
13% current/6% PIK Secured Debt (Maturity — November 14, 2011) | 1,008,000 | 1,008,000 | 1,008,000 | |||||||||||||
Member Units(7) (Fully diluted 25.1%) | 376,000 | 376,000 | ||||||||||||||
2,724,000 | 2,724,000 | |||||||||||||||
KBK Industries, LLC | Specialty Manufacturer | |||||||||||||||
14% Secured Debt (Maturity — January 23, 2011) | of Oilfield and | 3,937,500 | 3,937,500 | 3,937,500 | ||||||||||||
Member Units(7) (Fully diluted 11.9%) | Industrial Products | 187,500 | 625,000 | |||||||||||||
Warrants (Fully diluted 25.7%) | 150,000 | 1,372,500 | ||||||||||||||
4,275,000 | 5,935,000 | |||||||||||||||
Magna Card, Inc. | Wholesale/Consumer | |||||||||||||||
12% Secured Debt (Maturity — September 30, 2010) | Magnetic Products | 1,900,000 | 1,900,000 | 1,900,000 | ||||||||||||
Warrants (Fully diluted 35.8%) | 100,000 | — | ||||||||||||||
2,000,000 | 1,900,000 | |||||||||||||||
Quest Design & Production, LLC | Design and Fabrication | |||||||||||||||
12% Secured Debt (Maturity — May 1, 2008) | of Custom Display | 3,900,000 | 3,900,000 | 3,900,000 | ||||||||||||
Warrants (Fully diluted 20.0%) | Systems | 40,000 | 40,000 | |||||||||||||
3,940,000 | 3,940,000 | |||||||||||||||
TA Acquisition Group, LP | Processor of | |||||||||||||||
12% Secured Debt (Maturity — July 29, 2010) | Construction | 2,860,000 | 2,860,000 | 2,860,000 | ||||||||||||
Partnership Interest(7) (Fully diluted 18.3%) | Aggregates | 357,500 | 2,630,000 | |||||||||||||
Warrants (Fully diluted 18.3%) | 82,500 | 2,650,000 | ||||||||||||||
3,300,000 | 8,140,000 | |||||||||||||||
Technical Innovations, LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — October 31, 2009) | Specialty Cutting | 1,850,000 | 1,387,500 | 1,387,500 | ||||||||||||
Prime Secured Debt (Maturity — October 31, 2009) | Tools and Punches | 462,500 | 462,500 | |||||||||||||
Member Units(7) (Fully diluted 1.6%) | 15,000 | 35,000 | ||||||||||||||
Warrants (Fully diluted 57.0%) | 400,000 | 1,285,000 | ||||||||||||||
2,265,000 | 3,170,000 | |||||||||||||||
Wicks N’ More LLC | Manufacturer of | |||||||||||||||
12% Secured Debt (Maturity — April 26, 2011) | High-end Candles | 3,720,000 | 3,720,000 | 3,720,000 | ||||||||||||
Member Units (Fully diluted 6.2%) | 180,000 | — | ||||||||||||||
Warrants (Fully diluted 24.0%) | 210,000 | — | ||||||||||||||
4,110,000 | 3,720,000 | |||||||||||||||
Subtotal Control Investments | 33,312,337 | 42,429,000 | ||||||||||||||
See accompanying notes to consolidated financial statements.
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COMBINED SCHEDULE OF INVESTMENTS
December 31, 2006
Portfolio Company/Type of Investment (1) (2) | Industry | Principal(6) | Cost(6) | Fair Value | ||||||||||||
Affiliate Investments(4) | ||||||||||||||||
All Hose & Specialty, LLC | Distributor of | |||||||||||||||
11% Secured Debt (Maturity — August 4, 2010) | Commercial/Industrial | 2,600,000 | 2,600,000 | 2,600,000 | ||||||||||||
Member Units(7) (Fully diluted 15.0%) | Hoses | 80,357 | 1,600,000 | |||||||||||||
11% Note Receivable (Maturity — August 4, 2010) | 34,821 | 441,000 | ||||||||||||||
2,715,178 | 4,641,000 | |||||||||||||||
American Sensor Technologies, Inc. | Manufacturer of | |||||||||||||||
9% Secured Debt (Maturity — May 31, 2010) | Commercial/ | 200,000 | 200,000 | 200,000 | ||||||||||||
13% Secured Debt (Maturity — May 31, 2010) | Industrial Sensors | 3,000,000 | 3,000,000 | 3,000,000 | ||||||||||||
Warrants (Fully diluted 20.0%) | 50,000 | 575,000 | ||||||||||||||
3,250,000 | 3,775,000 | |||||||||||||||
Carlton Global Resources, LLC | Processor of | |||||||||||||||
13% Secured Debt (Maturity — November 15, 2011) | Industrial Minerals | 3,600,000 | 3,600,000 | 3,600,000 | ||||||||||||
Member Units (Fully diluted 8.5%) | 400,000 | 400,000 | ||||||||||||||
4,000,000 | 4,000,000 | |||||||||||||||
Houston Plating & Coatings, LLC | Plating & Industrial | |||||||||||||||
Prime plus 2% Secured Debt (Maturity — July 19, 2011) | Coating Services | 100,000 | 100,000 | 100,000 | ||||||||||||
Member Units(7) (Fully diluted 11.8%) | 210,000 | 1,710,000 | ||||||||||||||
310,000 | 1,810,000 | |||||||||||||||
Laurus Healthcare, LP | Healthcare Facilities | |||||||||||||||
13% Secured Debt (Maturity — May 7, 2009) | 3,010,000 | 3,010,000 | 3,010,000 | |||||||||||||
Warrants (Fully diluted 18.2%) | 105,000 | 105,000 | ||||||||||||||
3,115,000 | 3,115,000 | |||||||||||||||
National Trench Safety, LLC | Trench & Traffic | |||||||||||||||
Member Units (Fully diluted 15.8%) | Safety Equipment | 1,792,308 | 1,792,308 | |||||||||||||
Pulse Systems, LLC | Manufacturer of | |||||||||||||||
14% Secured Debt (Maturity — June 1, 2009) | Components for | 2,747,271 | 2,747,271 | 2,747,271 | ||||||||||||
Warrants (Fully diluted 6.6%) | Medical Devices | 118,000 | 400,000 | |||||||||||||
2,865,271 | 3,147,271 | |||||||||||||||
Transportation General, Inc. | Taxi Cab/Transportation | |||||||||||||||
13% Secured Debt (Maturity — May 31, 2010) | Services | 3,900,000 | 3,900,000 | 3,900,000 | ||||||||||||
Warrants (Fully diluted 24.0%) | 70,000 | 395,000 | ||||||||||||||
3,970,000 | 4,295,000 | |||||||||||||||
Turbine Air Systems, Ltd. | Commercial/ | |||||||||||||||
12% Secured Debt (Maturity — October 11, 2011) | Industrial Chilling | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Warrants (Fully diluted 5.0%) | Systems | 96,666 | 96,666 | |||||||||||||
1,096,666 | 1,096,666 | |||||||||||||||
WorldCall, Inc. | Telecommunication/ | |||||||||||||||
13% Secured Debt (Maturity — October 22, 2009) | Information Services | 820,000 | 820,000 | 820,000 | ||||||||||||
Common stock (Fully diluted 6.2%) | 169,173 | 180,000 | ||||||||||||||
Warrants (Fully diluted 13.4%) | 75,000 | 150,000 | ||||||||||||||
1,064,173 | 1,150,000 | |||||||||||||||
Barton Springs Grill LP | Restaurant | |||||||||||||||
15% Partnership Interest | 150,000 | — | ||||||||||||||
Subtotal Affiliate Investments | 24,328,596 | 28,822,245 | ||||||||||||||
Non-Control/Non-Affiliate Investments(5): | ||||||||||||||||
East Teak Fine Hardwoods, Inc. | Hardwood Products | |||||||||||||||
13% Current/5.5% PIK Secured Debt (Maturity — April 13, 2011) | 4,394,763 | 4,394,763 | 4,394,763 | |||||||||||||
Common Stock (Fully diluted 3.3%) | 130,000 | 335,000 | ||||||||||||||
4,524,763 | 4,729,763 | |||||||||||||||
Digital Music Group, Inc. | Distribution of Music | |||||||||||||||
Common stock | and Video Content | 458,252 | 228,420 | |||||||||||||
Subtotal Non-Control/Non-Affiliate Investments | 4,983,015 | 4,958,183 | ||||||||||||||
Total Portfolio Investments, December 31, 2006 | $ | 62,623,948 | $ | 76,209,428 | ||||||||||||
Accumulated unearned income | $ | (2,498,427 | ) | |||||||||||||
Total Portfolio Investments net of accumulated unearned income | $ | 73,711,001 | ||||||||||||||
(1) | All debt investments are income producing. Equity and warrants are non-income producing unless otherwise noted | |
(2) | See footnote C for summary geographic location of portfolio companies | |
(3) | Control investments are defined by the Investment Company Act of 1940 (“1940 Act”) as investments in companies in which more than 25% of the voting securities are owned or where greater than 50% of the board representation is maintained. | |
(4) | Affiliate investments are defined by the 1940 Act as those Non-Control investments in companies in which between 5% and 25% of the voting securities are owned. | |
(5) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments or Affiliate Investments | |
(6) | Net of prepayments. | |
(7) | Income producing through payment of dividends or distributions. |
See accompanying notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
• | MSCC acquired 100% of the limited partnership interests in the Fund, which became a wholly-owned consolidated subsidiary of MSCC; the Fund retained its Small Business Investment Company (“SBIC”) license, continued to hold its existing investments, and will make new investments with available funds; | ||
• | MSCC acquired 100% of the equity interests in the General Partner of the Fund, which became a wholly-owned consolidated subsidiary of MSCC; and | ||
• | MSCC acquired 100% of the equity interests in the Investment Manager. The Investment Manager became a wholly-owned portfolio company of MSCC under the 1940 Act, as the Investment Manager does not conduct substantially all of its investment management activities for Main Street and its subsidiaries. See Note D for further information regarding this classification and accounting treatment. |
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Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
Beginning accumulated unearned income | $ | 2,498,427 | $ | 2,602,632 | ||||
Debt origination fees received | 467,558 | 709,980 | ||||||
Value of warrants received | 407,119 | 566,166 | ||||||
Unearned income recognized | (998,069 | ) | (1,380,351 | ) | ||||
Ending accumulated unearned income | $ | 2,375,035 | $ | 2,498,427 | ||||
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December 31, | ||||||||
Cost: | 2007 | 2006 | ||||||
First lien debt | 81.71 | % | 77.08 | % | ||||
Second lien debt | 6.28 | % | 11.81 | % | ||||
Equity | 10.34 | % | 7.62 | % | ||||
Equity warrants | 1.67 | % | 3.49 | % | ||||
100.00 | % | 100.00 | % | |||||
December 31, | ||||||||
Fair Value: | 2007 | 2006 | ||||||
First lien debt | 70.62 | % | 63.88 | % | ||||
Second lien debt | 3.45 | % | 9.70 | % | ||||
Equity | 18.10 | % | 12.65 | % | ||||
Equity warrants | 7.83 | % | 13.77 | % | ||||
100.00 | % | 100.00 | % | |||||
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December 31, | ||||||||
Cost: | 2007 | 2006 | ||||||
Southwest | 31.94 | % | 39.92 | % | ||||
West | 36.85 | % | 24.74 | % | ||||
Northeast | 11.41 | % | 14.72 | % | ||||
Southeast | 13.91 | % | 13.79 | % | ||||
Midwest | 5.89 | % | 6.83 | % | ||||
100.00 | % | 100.00 | % | |||||
December 31, | ||||||||
Fair Value: | 2007 | 2006 | ||||||
Southwest | 41.01 | % | 47.24 | % | ||||
West | 32.91 | % | 20.80 | % | ||||
Northeast | 9.06 | % | 11.09 | % | ||||
Southeast | 10.44 | % | 13.08 | % | ||||
Midwest | 6.58 | % | 7.79 | % | ||||
100.00 | % | 100.00 | % | |||||
December 31, | ||||||||
Cost: | 2007 | 2006 | ||||||
Manufacturing | 12.35 | % | 15.14 | % | ||||
Agricultural services | 11.42 | % | — | |||||
Electronics manufacturing | 9.58 | % | 5.19 | % | ||||
Construction/industrial minerals | 9.04 | % | 11.66 | % | ||||
Custom wood products | 8.29 | % | 6.29 | % | ||||
Transportation/logistics | 6.64 | % | 9.64 | % | ||||
Industrial Equipment | 6.49 | % | — | |||||
Health care services | 5.86 | % | 4.97 | % | ||||
Metal Fabrication | 4.68 | % | — | |||||
Health care products | 4.25 | % | 8.19 | % | ||||
Restaurant | 3.41 | % | 5.34 | % | ||||
Professional services | 3.33 | % | 4.83 | % | ||||
Retail | 3.23 | % | 4.35 | % | ||||
Equipment rental | 2.64 | % | 2.86 | % | ||||
Consumer products | 2.59 | % | 3.19 | % | ||||
Building products | 2.39 | % | 3.86 | % | ||||
Distribution | 2.18 | % | 11.56 | % | ||||
Information services | 1.25 | % | 2.43 | % | ||||
Industrial services | 0.38 | % | 0.50 | % | ||||
Total | 100.00 | % | 100.00 | % | ||||
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December 31, | ||||||||
Fair Value: | 2007 | 2006 | ||||||
Construction/industrial minerals | 12.80 | % | 15.93 | % | ||||
Agricultural services | 10.34 | % | — | |||||
Manufacturing | 9.84 | % | 14.11 | % | ||||
Electronics manufacturing | 9.69 | % | 4.95 | % | ||||
Custom wood products | 7.51 | % | 5.17 | % | ||||
Transportation/logistics | 6.59 | % | 9.70 | % | ||||
Health care services | 5.98 | % | 4.09 | % | ||||
Industrial Equipment | 5.91 | % | — | |||||
Restaurant | 4.42 | % | 5.31 | % | ||||
Metal Fabrication | 4.34 | % | — | |||||
Health care products | 4.10 | % | 8.29 | % | ||||
Professional services | 4.10 | % | 4.37 | % | ||||
Retail | 3.41 | % | 3.57 | % | ||||
Industrial services | 2.82 | % | 2.38 | % | ||||
Equipment rental | 2.39 | % | 2.35 | % | ||||
Distribution | 2.37 | % | 12.30 | % | ||||
Building products | 2.16 | % | 3.18 | % | ||||
Information services | 1.23 | % | 1.81 | % | ||||
Consumer products | — | 2.49 | % | |||||
Total | 100.00 | % | 100.00 | % | ||||
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As of | ||||
December 31, 2007 | ||||
ASSETS | ||||
Current assets | $ | 129,675 | ||
Total assets | $ | 129,675 | ||
LIABILITIES | ||||
Current liabilities** | $ | 274,247 | ||
Total liabilities | $ | 274,247 | ||
For the Period | ||||
October 2, 2007 | ||||
through | ||||
December 31, 2007 | ||||
Management fee income from Main Street Capital II | $ | 831,300 | ||
Compensation and other administrative expenses | (831,300 | ) | ||
Net income | $ | — | ||
** | Includes $207,783 due to MSCC. |
December 31, | ||||||||
2007 | 2006 | |||||||
SBIC debenture commitment fees | $ | 550,000 | $ | 550,000 | ||||
SBIC debenture leverage fees | 1,367,575 | 1,127,500 | ||||||
Other | 282,512 | — | ||||||
Subtotal | 2,200,087 | 1,677,500 | ||||||
Accumulated amortization | (529,952 | ) | (343,846 | ) | ||||
Ending deferred financing costs balance | $ | 1,670,135 | $ | 1,333,654 | ||||
Year Ending | Estimated | |||
December 31, | Amortization | |||
2008 | $ | 333,013 | ||
2009 | 333,013 | |||
2010 | 191,757 | |||
2011 | 191,757 | |||
2012 | 191,757 | |||
2013 and thereafter | $ | 428,838 |
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Maturity | Fixed | |||||||||||
Pooling Date | Date | Interest Rate | Amount | |||||||||
09/24/2003 | 09/01/2013 | 5.762 | % | $ | 4,000,000 | |||||||
03/24/2004 | 03/01/2014 | 5.007 | % | 3,000,000 | ||||||||
09/22/2004 | 09/01/2014 | 5.571 | % | 9,000,000 | ||||||||
09/22/2004 | 09/01/2014 | 5.539 | % | 6,000,000 | ||||||||
03/23/2005 | 03/01/2015 | 5.925 | % | 2,000,000 | ||||||||
03/23/2005 | 03/01/2015 | 5.893 | % | 2,000,000 | ||||||||
09/28/2005 | 09/01/2015 | 5.796 | % | 19,100,000 | ||||||||
Balance as of December 31, 2006 | 45,100,000 | |||||||||||
3/28/2007 | 03/01/2017 | 6.231 | % | 3,900,000 | ||||||||
3/28/2007 | 03/01/2017 | 6.263 | % | 1,000,000 | ||||||||
3/28/2007 | 03/01/2017 | 6.317 | % | 5,000,000 | ||||||||
Balance as of December 31, 2007 | $ | 55,000,000 | ||||||||||
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Year Ended | ||||
December 31, | ||||
Per Share Data: | 2007 | |||
Net asset value at beginning of year | $ | 4.90 | ||
Net investment income (1) | 0.76 | |||
Net realized gains (1), (2) | 0.55 | |||
Net change in unrealized depreciation on investments (1), (2) | (0.63 | ) | ||
Income taxes (1) | (0.38 | ) | ||
Net increase in net assets resulting from operations (1) | 0.30 | |||
Net increase in net assets associated with the Formation Transactions and the Offering | 8.66 | |||
Net decrease in net assets from net distributions to partners (prior to Formation Transactions) (1), (3) | (0.72 | ) | ||
Net decrease in net assets from dividends paid to stockholders (subsequent to the Offering) | (0.33 | ) | ||
Shares issued pursuant to the dividend reinvestment plan | 0.22 | |||
Other (4) | (0.18 | ) | ||
Net asset value at end of year | $ | 12.85 | ||
Market value at end of year | $ | 14.01 | ||
Shares outstanding at end of year | 8,959,718 |
(1) | Based on weighted average number of common shares outstanding for the period. | |
(2) | Net realized gains and net change in unrealized appreciation or depreciation can fluctuate significantly from period to period. | |
(3) | Net of partner contributions made during the period. | |
(4) | Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date. |
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Years Ended December 31, | ||||||||||||
2007 | 2006(1) | 2005(1) | ||||||||||
Net assets at end of period | $ | 115,149,208 | $ | 43,272,531 | $ | 33,268,742 | ||||||
Average net assets | 56,882,526 | 38,621,188 | 23,534,007 | |||||||||
Average outstanding debt | 53,020,000 | 45,100,000 | 34,400,000 | |||||||||
Ratio of total expenses, excluding interest expense, to average net assets(2)(4) | 4.76 | % | 5.54 | % | 9.03 | % | ||||||
Ratio of total expenses to average net assets(2)(4) | 10.47 | % | 12.58 | % | 17.80 | % | ||||||
Ratio of net investment income to average net assets | 11.47 | % | 12.70 | % | 14.32 | % | ||||||
Total return based on change in net asset value(3)(5) | 5.88 | % | 47.56 | % | 45.77 | % |
(1) | The amounts reflected in the financial highlights above represent the combined general partner and limited partner amounts. | |
(2) | The Investment Manager voluntarily waived $48,000 of management fees for the years ended December 31, 2006 and 2005. | |
(3) | Total return based on change in net asset value was calculated using the sum of ending net asset value plus distributions to stockholders and/or members and partners during the period less capital contributions during the period, as divided by the beginning net asset value. | |
(4) | The December 31, 2007 ratio includes the impact of professional costs related to the Offering. These costs were 25.7% and 11.7% of operating expense and total expenses, respectively, for that period. | |
(5) | For the periods prior to the Formation Transactions, this ratio combines the total return for both the managing investors (the General Partner) and the non-managing investors (limited partners). |
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December 31, | ||||
2007 | ||||
Current tax expense: | ||||
Federal | $ | 162,274 | ||
State | 14,593 | |||
Total current tax expense | 176,867 | |||
Deferred tax expense: | ||||
Federal | 2,967,286 | |||
State | 58,386 | |||
Total deferred tax expense | 3,025,672 | |||
Excise tax | 60,000 | |||
Total provision for income taxes | $ | 3,262,539 | ||
(Estimated) (1) | ||||
Net increase in net assets resulting from operations | $ | 2,544,876 | ||
Earnings prior to Formation Transactions | (5,819,311 | ) | ||
Net change in unrealized depreciation from investments subsequent to Formation Transactions | 5,420,834 | |||
Net income from taxable subsidiary, MSEI, net of income tax provision (2) | (622,545 | ) | ||
Cumulative deferred tax expense related to MSEI portfolio investments for the period prior to Formation Transactions | 2,864,123 | |||
Nondeductible excise tax | 60,000 | |||
Other realized loss related items | (90,098 | ) | ||
Taxable income | 4,357,879 | |||
Taxable income earned in current year and carried forward for distribution in next year | (1,445,059 | ) | ||
Total distributions to common stockholders | $ | 2,912,820 | ||
(1) | Main Street’s taxable income for 2007 is an estimate and will not be finally determined until the company files its 2007 tax return in September 2008. Therefore, the final taxable income and the taxable income earned in 2007 and carried forward for distribution in 2008 may be different than this estimate. | |
(2) | The MSEI income tax provision is for the period subsequent to the Formation Transactions (October 2, 2007 through December 31, 2007) and consists of a current component ($165,467) and a deferred component ($161,549). |
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2006 | 2005 | |||||||
Net increase in net assets resulting from operations | $ | 15,822,997 | $ | 7,890,063 | ||||
Net change in unrealized (appreciation) from investments | (8,488,514 | ) | (3,032,274 | ) | ||||
Accrual basis to cash basis adjustments: | ||||||||
Deferred debt origination fees included in taxable income | 709,980 | 535,250 | ||||||
Accretion of unearned fee income for book income | (517,649 | ) | (508,406 | ) | ||||
Net change in interest receivable | (93,480 | ) | (182,324 | ) | ||||
Net change in interest payable | 83,459 | 417,325 | ||||||
Portfolio company pass through taxable income (loss) | 610,866 | (815,510 | ) | |||||
Other | (321,295 | ) | (441,231 | ) | ||||
Taxable income | $ | 7,806,364 | $ | 3,862,893 | ||||
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2007 | 2006 | 2005 | ||||||||||
Interest paid | $ | 2,852,002 | $ | 2,475,926 | $ | 1,481,191 | ||||||
Taxes paid | $ | — | $ | — | $ | — | ||||||
Non-cash investing and financing activity: | ||||||||||||
Investment in the Investment Manager (Main Street Capital Partners) | $ | 18,000,000 | $ | — | $ | — | ||||||
Issuance of shares for dividend reinvestment plan | $ | 1,903,116 | $ | — | $ | — |
2007 | ||||||||||||||||
Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | |||||||||||||
Total investment income | $ | 2,253,468 | $ | 2,927,033 | $ | 2,968,425 | $ | 3,163,187 | ||||||||
Net investment income | $ | 1,170,179 | $ | 970,897 | $ | 1,745,144 | $ | 2,635,479 | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,779,474 | $ | 1,330,897 | $ | 2,708,941 | $ | (3,274,436 | ) | |||||||
Net investment income per common share-basic and diluted | $ | 0.14 | $ | 0.11 | $ | 0.20 | $ | 0.30 | ||||||||
Net increase in net assets resulting from operations per common share-basic and diluted | $ | 0.21 | $ | 0.16 | $ | 0.32 | $ | (0.37 | ) |
2006 | ||||||||||||||||
Qtr. 1 | Qtr. 2 | Qtr. 3 | Qtr. 4 | |||||||||||||
Total investment income | $ | 2,095,256 | $ | 2,478,398 | $ | 2,255,170 | $ | 2,184,313 | ||||||||
Net investment income | $ | 1,111,225 | $ | 1,410,085 | $ | 1,230,153 | $ | 1,153,097 | ||||||||
Net increase in net assets resulting from operations | $ | 3,714,625 | $ | 2,686,023 | $ | 6,731,463 | $ | 2,690,886 | ||||||||
Net investment income per common share-basic and diluted | N/A | N/A | N/A | N/A | ||||||||||||
Net increase in net assets resulting from operations per common share-basic and diluted | N/A | N/A | N/A | N/A |
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Main Street Capital Corporation
March 18, 2008
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Schedule of Investments in and Advances to Affiliates
Year ended December 31, 2007
Amount of | ||||||||||||||||||||||
Interest or | ||||||||||||||||||||||
Dividends | ||||||||||||||||||||||
Credited to | December 31, | Gross | Gross | December 31, | ||||||||||||||||||
Company | Investments (1) | Income (2) | 2006 Value | Additions (3) | Reductions (4) | 2007 Value | ||||||||||||||||
CONTROL INVESTMENTS | ||||||||||||||||||||||
Café Brazil, LLC | 12% Secured Debt | $ | 398,180 | $ | 3,150,000 | $ | — | $ | 400,000 | $ | 2,750,000 | |||||||||||
Member Units | 127,861 | 900,000 | 380,000 | 30,000 | 1,250,000 | |||||||||||||||||
CBT Nuggets, LLC | Prime plus 2% Secured Debt | 51,591 | 660,000 | — | 300,000 | 360,000 | ||||||||||||||||
14% Secured Debt | 275,399 | 1,860,000 | — | — | 1,860,000 | |||||||||||||||||
Member Units | 270,000 | 610,000 | 535,000 | — | 1,145,000 | |||||||||||||||||
Warrants | — | 200,000 | 145,000 | — | 345,000 | |||||||||||||||||
Gulf Manufacturing, LLC | Prime plus 1% Secured Debt | 48,519 | — | 1,200,000 | — | 1,200,000 | ||||||||||||||||
13% Secured Debt | 162,049 | — | 2,000,000 | — | 2,000,000 | |||||||||||||||||
Member Units | — | — | 472,000 | — | 472,000 | |||||||||||||||||
Warrants | — | — | 250,000 | — | 250,000 | |||||||||||||||||
Hawthorne Customs & Dispatch Services, LLC | 13% Secured Debt | 219,640 | 1,650,000 | — | 300,000 | 1,350,000 | ||||||||||||||||
Member Units | 31,000 | 950,000 | — | 515,000 | 435,000 | |||||||||||||||||
Warrants | — | 500,000 | — | 270,000 | 230,000 | |||||||||||||||||
Hayden Acquisition, LLC | 12% Secured Debt | 311,157 | �� | 2,420,000 | — | 465,000 | 1,955,000 | |||||||||||||||
Hydratec Holdings, LLC | 12.5% Secured Debt | 194,423 | — | 5,700,000 | — | 5,700,000 | ||||||||||||||||
Prime plus 1% Secured Debt | 39,783 | — | 1,845,244 | — | 1,845,244 | |||||||||||||||||
Member Units | — | — | 1,800,000 | — | 1,800,000 | |||||||||||||||||
Jensen Jewelers of Idaho, LLC | Prime plus 2% Secured Debt | 128,904 | 1,340,000 | 80,000 | 220,000 | 1,200,000 | ||||||||||||||||
13% Current/6% PIK Secured Debt | 198,736 | 1,008,000 | 61,457 | — | 1,069,457 | |||||||||||||||||
Member Units | 136,049 | 376,000 | 439,000 | — | 815,000 | |||||||||||||||||
KBK Industries, LLC | 14% Secured Debt | 51,473 | 3,937,500 | — | 3,937,500 | — | ||||||||||||||||
Member Units | — | 625,000 | — | 625,000 | — | |||||||||||||||||
Warrants | — | 1,372,500 | — | 1,372,500 | — | |||||||||||||||||
Magna Card, Inc. | 12% Current/0.4% PIK Secured Debt | 267,695 | 1,900,000 | 121,079 | 2,021,079 | — | ||||||||||||||||
Quest Design & Production LLC | 8% Current/5% PIK Secured Debt | 566,235 | 3,900,000 | 91,542 | — | 3,991,542 | ||||||||||||||||
Warrants | — | 40,000 | — | — | 40,000 | |||||||||||||||||
TA Acquisition Group, LP | 12% Secured Debt | 346,519 | 2,860,000 | — | 990,000 | 1,870,000 | ||||||||||||||||
Partnership Interest | 105,053 | 2,630,000 | 805,000 | — | 3,435,000 | |||||||||||||||||
Warrants | — | 2,650,000 | 800,000 | — | 3,450,000 | |||||||||||||||||
Technical Innovations, LLC | 12% Secured Debt | 372,981 | 1,387,500 | 600,000 | 787,500 | |||||||||||||||||
Prime Secured Debt | 32,058 | 462,500 | 200,000 | 262,500 | ||||||||||||||||||
Member Units | 3,285 | 35,000 | 5,000 | 40,000 | — | |||||||||||||||||
Warrants | — | 1,285,000 | 130,000 | 1,415,000 | — | |||||||||||||||||
Universal Scaffolding & Equipment, LLC | Prime plus 1% Secured Debt | 52,273 | — | 1,202,500 | 80,167 | 1,122,333 | ||||||||||||||||
13% Current/5% PIK Secured Debt | 281,897 | — | 3,196,376 | — | 3,196,376 | |||||||||||||||||
Member Units | — | — | 1,025,000 | — | 1,025,000 | |||||||||||||||||
Wicks N’ More, LLC | 12% Secured Debt | 513,369 | 3,720,000 | — | 1,770,000 | 1,950,000 | ||||||||||||||||
Member Units | — | — | 180,000 | 180,000 | — | |||||||||||||||||
Income from Control Investments disposed of during the year | 15,253 | — | — | — | — | |||||||||||||||||
Total — Control | $ | 5,201,382 | $ | 42,429,000 | $ | 22,464,198 | $ | 15,731,246 | $ | 49,161,952 | ||||||||||||
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Schedule of Investments in and Advances to Affiliates
Year ended December 31, 2007
Amount of | ||||||||||||||||||||||
Interest or | ||||||||||||||||||||||
Dividends | ||||||||||||||||||||||
Credited to | December 31, | Gross | Gross | December 31, | ||||||||||||||||||
Company | Investments (1) | Income (2) | 2006 Value | Additions (3) | Reductions (4) | 2007 Value | ||||||||||||||||
AFFILIATE INVESTMENTS | ||||||||||||||||||||||
Advantage Millwork Company, Inc. | 12% Secured Debt | $ | 327,874 | $ | — | $ | 2,666,667 | $ | — | $ | 2,666,667 | |||||||||||
Warrants | — | — | 87,120 | — | 87,120 | |||||||||||||||||
All Hose & Speciality, LLC | 11% Secured Debt | — | 2,600,000 | — | 2,600,000 | — | ||||||||||||||||
Member Units | — | 1,600,000 | — | 1,600,000 | — | |||||||||||||||||
11% Note Receivable | — | 441,000 | — | 441,000 | — | |||||||||||||||||
American Sensor Technologies, Inc. | Prime plus .50% Secured Debt | 425,789 | 3,200,000 | 300,000 | — | 3,500,000 | ||||||||||||||||
Warrants | — | 575,000 | 175,000 | — | 750,000 | |||||||||||||||||
Carlton Global Resources, LLC | 13% Secured Debt | 425,983 | 3,600,000 | 1,087,777 | 1,875,110 | 2,812,667 | ||||||||||||||||
Member Units | — | 400,000 | — | 400,000 | — | |||||||||||||||||
Houston Plating & Coatings, LLC | Prime plus 2% Secured Debt | 10,049 | 100,000 | — | — | 100,000 | ||||||||||||||||
Member Units | 340,477 | 1,710,000 | 740,000 | — | 2,450,000 | |||||||||||||||||
KBK Industries, LLC | 14% Secured Debt | 556,595 | — | 3,937,500 | — | 3,937,500 | ||||||||||||||||
8% Secured Debt | 34,491 | — | 623,063 | — | 623,063 | |||||||||||||||||
Prime plus 2% Secured Debt | 63,861 | — | 686,250 | — | 686,250 | |||||||||||||||||
Member Units | 110,437 | — | 700,000 | — | 700,000 | |||||||||||||||||
Warrants | — | — | 1,372,500 | 1,372,500 | — | |||||||||||||||||
Laurus Healthcare, LP, | 13% Secured Debt | 444,737 | 3,010,000 | — | — | 3,010,000 | ||||||||||||||||
Warrants | — | 105,000 | 610,000 | — | 715,000 | |||||||||||||||||
National Trench Safety, LLC | 10% PIK Debt | 41,205 | — | 365,334 | — | 365,334 | ||||||||||||||||
Member Units | — | 1,792,308 | — | — | 1,792,308 | |||||||||||||||||
Pulse Systems, LLC | 14% Secured Debt | 396,755 | 2,747,271 | — | 439,773 | 2,307,498 | ||||||||||||||||
Warrants | — | 400,000 | 125,000 | 175,000 | 350,000 | |||||||||||||||||
Transportation General Inc. | 13% Secured Debt | 524,976 | 3,900,000 | — | 300,000 | 3,600,000 | ||||||||||||||||
Warrants | — | 395,000 | 85,000 | 140,000 | 340,000 | |||||||||||||||||
Turbine Air Systems, Ltd. | 12% Secured Debt | 139,476 | 1,000,000 | — | — | 1,000,000 | ||||||||||||||||
Warrants | — | 96,666 | — | 96,666 | — | |||||||||||||||||
Vision Interests, Inc. | 13% Secured Debt | 377,196 | — | 3,760,000 | — | 3,760,000 | ||||||||||||||||
Common Stock | — | — | 372,000 | — | 372,000 | |||||||||||||||||
Warrants | — | — | 375,000 | — | 375,000 | |||||||||||||||||
WorldCall, Inc. | 13% Secured Debt | 126,746 | 820,000 | — | 37,500 | 782,500 | ||||||||||||||||
Common Stock | — | 180,000 | — | — | 180,000 | |||||||||||||||||
Warrants | — | 150,000 | — | — | 150,000 | |||||||||||||||||
Barton Springs Grill LP | 15% Partnership Interest | — | — | 150,000 | 150,000 | — | ||||||||||||||||
Income from Affiliate Investments disposed of during the year | 1,044,008 | — | — | — | — | |||||||||||||||||
Total — Affiliate Investments | $ | 5,390,655 | $ | 28,822,245 | $ | 18,218,211 | $ | 9,627,549 | $ | 37,412,907 | ||||||||||||
(1) | The principal amount, the ownership detail for equity investments and if the investment is income producing is shown in the Consolidated and Combined Schedule of Investments. | |
(2) | Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate during the year, the income related to the time period it was in the category other than the one shown at year end is included in “Income from Investment disposed of during the year”. | |
(3) | Gross additions include increases in the cost basis of investments resulting from new portfolio investment , follow on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross Additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category. | |
(4) | Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category. |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
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Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits and Financial Statement Schedules |
Report of Independent Registered Public Accounting Firm |
Consolidated Balance Sheet as of December 31, 2007 and Combined Balance Sheet as of December 31, 2006 |
Consolidated Statement of Operations for the Year Ended December 31, 2007 and Combined Statements of Operations for the Years Ended December 31, 2006 and 2005 |
Consolidated Statement of Changes in Net Assets for the Year Ended December 31, 2007 and Combined Statements of Changes in Net Assets for the Years Ended December 31, 2006 and 2005 |
Consolidated Statements of Cash Flows for the Year Ended December 31, 2007 and Combined Statements of Cash Flows for the Years Ended December 31, 2006 and 2005 |
Consolidated Schedule of Investments as of December 31, 2007 and Combined Schedule of Investments as of December 31, 2006 |
Notes to Consolidated Financial Statements |
Schedule of Investments in and Advances to Affiliates for the Year Ended December 31, 2007
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Exhibit | ||||
Number | Description | |||
1.1 | * | Form of Underwriting Agreement (previously filed as exhibit (h) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
3.1 | * | Articles of Amendment and Restatement of Main Street Capital Corporation (previously filed as exhibit (a) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
3.2 | * | Amended and Restated Bylaws of Main Street Capital Corporation(previously filed as exhibit (b) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879))* | ||
4.1 | * | Form of Common Stock Certificate (previously filed as exhibit (d) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
4.2 | Dividend Reinvestment Plan | |||
4.3 | * | Debentures guaranteed by the SBA (previously filed as exhibit (f)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.1 | * | Treasury Secured Revolving Credit Agreement dated December 31, 2007 (previously filed as exhibit 10.1 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.2 | * | Security Agreement dated December 31, 2007 (previously filed as exhibit 10.2 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.3 | * | Control Agreement dated December 31, 2007 (previously filed as exhibit 10.3 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.4 | * | Custody Agreement dated December 31, 2007 (previously filed as exhibit 10.4 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.5 | * | Form of Amended and Restated Advisory Agreement by and between Main Street Capital Partners, LLC and Main Street Mezzanine Fund, LP (previously filed as exhibit (g)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.6 | * | Advisory Agreement by and between Main Street Capital Partners, LLC and Main Street Capital II, LP (previously filed as exhibit (g)(2) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.7 | *† | Equity Incentive Plan (previously filed as exhibit (i)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.8 | * | Custodian Agreement (previously filed as exhibit (j) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.9 | *† | Form of Employment Agreement by and between the Registrant and Todd A. Reppert (previously filed as exhibit (k)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.10 | *† | Form of Employment Agreement by and between the Registrant and Rodger A. Stout (previously filed as exhibit (k)(2) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) |
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Exhibit | ||||
Number | Description | |||
10.11 | *† | Form of Employment Agreement by and between the Registrant and Curtis A. Hartman (previously filed as exhibit (k)(3) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.12 | *† | Form of Employment Agreement by and between the Registrant and Dwayne L. Hyzak (previously filed as exhibit (k)(4) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.13 | *† | Form of Employment Agreement by and between the Registrant and David L. Magdol (previously filed as exhibit (k)(5) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.14 | * | Agreement and Plan of Merger by and between Main Street Capital Corporation and Main Street Mezzanine Fund, LP (previously filed as exhibit (k)(6) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.15 | * | Exchange Agreement by and between Main Street Capital Corporation and Main Street Capital Partners, LLC (previously filed as exhibit (k)(7) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.16 | * | Exchange Agreement by and between Main Street Capital Corporation and Main Street Mezzanine Management, LLC (previously filed as exhibit (k)(8*) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.17 | * | Amendment to Agreement and Plan of Merger by and between Main Street Capital Corporation and Main Street Mezzanine Fund, LP (previously filed as exhibit (k)(9) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.18 | * | Amendment to Exchange Agreement by and between Main Street Capital Corporation and Main Street Capital Partners, LLC (previously filed as exhibit (k)(10) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.19 | * | Amendment to Exchange Agreement by and between Main Street Capital Corporation and Main Street Mezzanine Management, LLC (previously filed as exhibit (k)(11) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.20 | *† | Form of Confidentiality and Non-Compete Agreement by and between the Registrant and Vincent D. Foster (previously filed as exhibit (k)(12) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.21 | *† | Form of Indemnification Agreement by and between the Registrant and each executive officer and director (previously filed as exhibit (k)(13) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
14.1 | * | Code of Ethics (previously filed as exhibit (r) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
31.1 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Executive Officer | |||
31.2 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Financial Officer | |||
31.3 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Compliance Officer | |||
32.1 | Section 1350 certification of Chief Executive Officer | |||
32.2 | Section 1350 certification of Chief Financial Officer |
* | Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by reference. | |
† | Management contract or compensatory plan or arrangement |
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Table of Contents
MAIN STREET CAPITAL CORPORATION | ||||
By: | /s/Vincent D. Foster | |||
Vincent D. Foster | ||||
Chairman and Chief Executive Officer | ||||
Signature | Title | Date | ||
/s/Vincent D. Foster | Chairman and Chief Executive Officer | March 21, 2008 | ||
Vincent D. Foster | (principal executive officer) | |||
/s/Todd A. Reppert | President, Chief Financial Officer and | March 21, 2008 | ||
Todd A. Reppert | Director (principal financial officer) | |||
/s/Michael S. Galvan | Chief Accounting Officer | March 21, 2008 | ||
Michael S. Galvan | (principal accounting officer) | |||
/s/Rodger A. Stout | Senior Vice President-Finance & Administration, | March 21, 2008 | ||
Rodger A. Stout | Chief Compliance Officer, Secretary and Treasurer | |||
/s/Michael Appling Jr. | Director | March 21, 2008 | ||
Michael Appling Jr. | ||||
/s/Joseph E. Canon | Director | March 21, 2008 | ||
Joseph E. Canon | ||||
/s/William D. Gutermuth | Director | March 21, 2008 | ||
William D. Gutermuth | ||||
/s/Arthur L. French | Director | March 21, 2008 | ||
Arthur L. French |
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Table of Contents
Exhibit | ||||
Number | Description | |||
1.1 | * | Form of Underwriting Agreement (previously filed as exhibit (h) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
3.1 | * | Articles of Amendment and Restatement of Main Street Capital Corporation (previously filed as exhibit (a) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
3.2 | * | Amended and Restated Bylaws of Main Street Capital Corporation(previously filed as exhibit (b) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879))* | ||
4.1 | * | Form of Common Stock Certificate (previously filed as exhibit (d) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
4.2 | Dividend Reinvestment Plan | |||
4.3 | * | Debentures guaranteed by the SBA (previously filed as exhibit (f)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.1 | * | Treasury Secured Revolving Credit Agreement dated December 31, 2007 (previously filed as exhibit 10.1 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.2 | * | Security Agreement dated December 31, 2007 (previously filed as exhibit 10.2 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.3 | * | Control Agreement dated December 31, 2007 (previously filed as exhibit 10.3 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.4 | * | Custody Agreement dated December 31, 2007 (previously filed as exhibit 10.4 to Main Street Capital Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30. 2007 (File No. 1-33723)) | ||
10.5 | * | Form of Amended and Restated Advisory Agreement by and between Main Street Capital Partners, LLC and Main Street Mezzanine Fund, LP (previously filed as exhibit (g)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.6 | * | Advisory Agreement by and between Main Street Capital Partners, LLC and Main Street Capital II, LP (previously filed as exhibit (g)(2) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.7 | *† | Equity Incentive Plan (previously filed as exhibit (i)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.8 | * | Custodian Agreement (previously filed as exhibit (j) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.9 | *† | Form of Employment Agreement by and between the Registrant and Todd A. Reppert (previously filed as exhibit (k)(1) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.10 | *† | Form of Employment Agreement by and between the Registrant and Rodger A. Stout (previously filed as exhibit (k)(2) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10.11 | *† | Form of Employment Agreement by and between the Registrant and Curtis A. Hartman (previously filed as exhibit (k)(3) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.12 | *† | Form of Employment Agreement by and between the Registrant and Dwayne L. Hyzak (previously filed as exhibit (k)(4) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.13 | *† | Form of Employment Agreement by and between the Registrant and David L. Magdol (previously filed as exhibit (k)(5) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.14 | * | Agreement and Plan of Merger by and between Main Street Capital Corporation and Main Street Mezzanine Fund, LP (previously filed as exhibit (k)(6) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.15 | * | Exchange Agreement by and between Main Street Capital Corporation and Main Street Capital Partners, LLC (previously filed as exhibit (k)(7) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.16 | * | Exchange Agreement by and between Main Street Capital Corporation and Main Street Mezzanine Management, LLC (previously filed as exhibit (k)(8*) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.17 | * | Amendment to Agreement and Plan of Merger by and between Main Street Capital Corporation and Main Street Mezzanine Fund, LP (previously filed as exhibit (k)(9) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.18 | * | Amendment to Exchange Agreement by and between Main Street Capital Corporation and Main Street Capital Partners, LLC (previously filed as exhibit (k)(10) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.19 | * | Amendment to Exchange Agreement by and between Main Street Capital Corporation and Main Street Mezzanine Management, LLC (previously filed as exhibit (k)(11) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.20 | *† | Form of Confidentiality and Non-Compete Agreement by and between the Registrant and Vincent D. Foster (previously filed as exhibit (k)(12) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
10.21 | *† | Form of Indemnification Agreement by and between the Registrant and each executive officer and director (previously filed as exhibit (k)(13) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
14.1 | * | Code of Ethics (previously filed as exhibit (r) to Main Street Capital Corporation’s Registration Statement on Form N-2 (Reg. No. 333-142879)) | ||
31.1 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Executive Officer | |||
31.2 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Financial Officer | |||
31.3 | Rule 13a – 14(a)/15d – 14(a) certification of Chief Compliance Officer | |||
32.1 | Section 1350 certification of Chief Executive Officer | |||
32.2 | Section 1350 certification of Chief Financial Officer |
* | Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by reference. | |
† | Management contract or compensatory plan or arrangement |